Ward & Uptigrove

2023 Year End Newsletter

December 19, 2023

Please Note Our Holiday Shutdown

The offices of Ward & Uptigrove will be closed from 3:00 pm on Friday, December 22nd and reopening in the New Year on Tuesday, January 2nd.



Updates on Underused Housing Tax (UHT)

On October 31, 2023, which was also the first administratively extended deadline to file the UHT returns for the 2022 calendar year, the Minister of National Revenue announced a further deadline extension of April 30, 2024. As such, owners affected by the UHT will have until April 30, 2024 to file their returns for the 2022 calendar year without being charged penalties or interest.



Further changes to UHT were proposed in the federal government’s 2023 Fall Economic Statement released on November 21, 2023. These changes are the following:

Elimination of Filing Requirements for Most Canadians

Starting with the 2023 calendar year, the definition of “excluded owner” is proposed to be expanded to include specified Canadian corporations, partners of specified Canadian partnerships, and trustees of Canadian trusts as defined in the UHT Act. 


As “excluded owners” are not required to file UHT returns, when we look at our clients and the UHT returns that we prepared for the 2022 calendar year, we estimate only 1-2% will continue to have a filing requirement in 2023 under the new proposed rules. 


It is important to clarify that this proposed change starts with the 2023 calendar year. The filing requirement for the 2022 calendar year is not being changed.


Reduction of Failure to File Penalties

Based on the current rules, the minimum late filing penalty per return is $5,000 where the owner is an individual and $10,000 per return where the owner is a corporation.


The federal government has proposed to reduce the minimum late filing penalty per return to $1,000 where the owner is an individual and $2,000 per return where the owner is a corporation. 


This proposed change will be retroactive to the 2022 calendar year as well as future UHT filings. 


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Purchase of Depreciable Assets in 2024 and Onwards – Capital Cost Allowance (CCA) 

The eligibility period for acquiring eligible property for immediate expensing by a Canadian-controlled private corporation (CCPC) will end on December 31, 2023. The eligible property must be considered available for use by December 31, 2023 in order to be eligible for this measure.


The eligibility period for individual and Canadian partnership where all the members are individuals is December 31, 2024. Therefore, there is still time for individuals and Canadian partnerships to benefit from the immediate expensing measure. 


For an overview of the temporary immediate expensing measure, please refer to our previous article here.


For eligible property acquired after 2023 and before 2028 (hereinafter referred to as the “phase-out period”) by CCPC’s, the previous Accelerated Investment Incentive (AII) will apply subject to a new phase-out. 


For eligible property that would normally be subject to the half-year rule and that becomes available for use during the phase-out period, the enhanced first-year allowance is two times the normal first-year CCA deduction. In essence, CCA is calculated at the rate relevant to that class without applying the half-year rule. 


For eligible property that would not normally be subject to the half-year rule and that becomes available for use during the phase-out period, the enhanced first-year allowance is generally equal to one-and-a-quarter times the normal first-year CCA deduction. 


The following chart illustrates eligible property acquired and that becomes available for use in 2024 by a CCPC:



Normal Rules Under the All
Cost of Equipment Acquired (Class 8) $100,000 $100,000
Year CCA Rate CCA Claimed CCA Claimed
1 20% 10,000 20,000
2 20% 18,000 16,000
3 20% 14,000 12,800
UCC end of Year 3 57,600 51,200


The phase-out period after 2023 for manufacturing and processing, clean energy equipment, and zero-emissions vehicles and equipment will be the following:


  • 2024 and 2025: The first-year deduction is 75%
  • 2026 and 2027: The first-year deduction is 55%



ROITC Reminder

The temporary increase in the Regional Opportunities Investment Tax Credit (ROITC) rate (from 10% to 20%) for qualifying expenditures ends December 31, 2023. This credit applies to the construction, renovation or acquisition of eligible commercial and industrial buildings in certain regions.


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Changes to Interest Rates – Tax Implications

The recent rise in interest rates has resulted in the Canada Revenue Agency (CRA) increasing the following two key interest rates in 2023:



  • The interest rate on overdue taxes is currently 9%, and will be increasing to 10% in January 2024. 
  • The interest rate used to calculate taxable benefits to employees and shareholders from interest free and low-interest loans is currently 5%, and will be increasing to 6% in 2024. 


It is important to note that the interest the CRA charges is not tax deductible, making the interest even more punitive. Consequently, it is important to pay all amounts owing including instalments to the CRA on time. Larger penalties will be in effect if a business repeatedly misses deadlines.

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Tax Planning – Agriculture ï»¿

Each year, near the end of November and into December you should review if your taxable income will be higher than normal for 2023. 


Please review the options below which could be used to minimize your tax liability:


  • Prepaid Expenses - If you have the funds available, an effective way to defer taxes is to prepay for 2024 expenses prior to December 31st. Examples of common prepayments are for crop inputs and livestock feed.
  • Asset purchases – Immediate expense:
  • Corporation - If you operate Agricultural business as a Canadian-controlled private corporation (CCPC) and are holding off on an asset purchase until 2024, you might consider purchasing the asset before December 31st to take advantage of immediate expensing of asset purchases which will end on December 31, 2023. 
  • Sole Proprietors or Partnerships – The immediate expensing eligibility period for an individual and Canadian partnership where all the members are individuals is December 31, 2024. 
  • Asset purchases - accelerated capital cost allowance:
  • For any assets excluded from immediate expensing the purchase could qualify for the Accelerated Investment Incentive (AII). Please refer to the article here.
  • Payables – Pay invoices in 2023 rather than waiting until 2024. Paying as many expenses as possible before year-end, will result in more deductible expenses for 2023 on a cash basis and will reduce your taxable income for the current year.
  • Holding inventory - Delay the sale of inventory (crops, livestock) until 2024. If you were planning on selling some inventory (crops, livestock) before year end but you do not need the cash flow until after year end, deferring the sale or collection on a sale can be an effective method to defer taxes.

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Review Engagements – Accounting for Biological Assets and Additional Information Required

The new section of accounting standards providing guidance on accounting for agricultural inventories is effective for fiscal periods beginning on or after January 1, 2022. This standard will only affect your operations financial statements if you require financial statements subject to a “Review engagement”. 


This new section will require a distinction be made between agricultural inventories and productive biological assets (eg. dairy cows) with each being reported separately on agricultural producer’s financial statements. Agricultural inventories (eg. crops and non-productive livestock) can be measured at their cost or net realizable value. Productive biological assets must now be initially measured at cost and in most cases will be recorded as long-term assets on the financial statements as opposed to being recorded as inventory and a current asset. 


Agricultural producer’s financial statements will now include additional disclosure requirements for any productive biological assets and agricultural inventories. Transitional provisions will be considered for each client to reduce the administrative time in applying these new reporting standards. However, in order to properly implement the disclosure requirements additional information may be requested when preparing your review engagement financial statements. For example, additional information requested from clients may include livestock and produce production schedules which may not have been prepared in the past. Requests may also include quantities of crops harvested, quantities of crops purchased or sold number of head sold or purchased during the fiscal year. 


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Program and Tax Credit Updates

  • Poultry and Egg On-Farm Investment Program (PEFIP) is a 10-year program (ending March 31, 2031) to help supply-managed poultry and egg producers adapt to market changes resulting from the implementation of international trade agreements. Additional information can be found here. If you require assistance with the registration process or a project application, please contact your accountant.
  • Dairy Direct Payment Program has made available $1.2 billion in funding over the next 6 years to account for the impacts of the Canada-United States-Mexico Agreement (CUSMA). The 2023-2024 intake period is now open.
  • The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a new 5-year agreement, April 1, 2023 to March 31, 2028 between the federal, provincial and territorial governments. The agreement includes $1 billion for federal programs and activities, and $2.5 billion in cost-shared programs and activities funded by federal and provincial governments.
  • ACC loans – the interest free limit of the Advance Payments Program increased to $350,000 for the 2023 program year. Further information on the Advance Payments Program and other loan programs offered by ACC can be found here, or contact your accountant.



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Deadlines - AgriStability & AgriInvest

AgriStability: Deadlines for the 2023 program year

  • December 31, 2023: Apply for interim payment
  • December 31, 2023: Pay fee – final deadline (20 per cent increase)
  • June 15, 2024: Submit T1163 (individuals)
  • June 30, 2024: Submit Statement A (corporations, trusts and special individuals)
  • June 30, 2024: Submit Year-end report and Claim form
  • June 30, 2024: Pay fee, submit New Participant Form or cancel coverage for 2024 AgriStability
  • December 31, 2024: Final deadline – Report your 2023 farm income to Canada Revenue Agency (corporations)


AgriInvest: Deadlines for the 2023 program year

  • September 30, 2024: For individual participation AgriInvest only, submit 2023 T1163 to Canada Revenue Agency
  • September 30, 2024: For corporations, trusts and special individuals’ participating in AgriInvest only, submit 2023 Statement A to Agricorp


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Advancing in Ag through Stewardship with Maitland Conservation

A message from the Maitland Conservation Authority:

Covering the watersheds of the Maitland, Nine Mile, and Eighteen Mile rivers, and sub-watersheds along the Lake Huron shoreline, Maitland Conservation has various programs and recommendations dedicated to building agricultural resilience through on-farm practices.


These efforts target benefits including, reducing need for non-renewable fuel and fertilizers, reducing management costs, increasing economic benefit and ecological production, and restoring biodiversity.


Stewardship areas of focus include:

  • Cover Crops
  • Marginal Land Restoration
  • Stream Buffering
  • Wetlands
  • Windbreaks


Follow the link to discover opportunities for guidance and funding that will bring these benefits home.


Maitland Conservation Stewardship Newsletter


Tree and shrub orders are currently being accepted for spring 2024 planting. Order forms and program information are posted on their website at mvca.on.ca The deadline for orders is Jan. 31, 2024.


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CEBA Repayment

The CEBA loan forgiveness repayment deadline and terms have been updated but are still forthcoming. There are two ways to receive forgiveness: 


  1. The entire non-forgivable loan balance ($30,000 if a $40,000 loan was received or $40,000 if a $60,000 loan was received) must be repaid by January 18, 2024 OR 
  2. An application for alternative financing needs to be submitted prior to January 18, 2024 to the same financial institution the provided the original CEBA loan, and the non forgivable portion of the original CEBA loan is then repaid by no later than March 28, 2024.


If you do not repay your loan by January 18, 2024, your loan will convert to a term loan with full principal repayment due on December 31, 2026. Starting January 19, 2024, interest at a rate of 5% per annum will apply to the outstanding balance of your CEBA loan.


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Veterinary Incentive Program

The Veterinary Incentive Program is a new funding program in Ontario that aims to encourage newly licensed veterinarians who practice on food animals to work in underserviced areas, including northern communities. The grant is also available for licensed veterinarians who are relocating to a clinic in an underserviced area. Grant funds may total up to $50,000 per person, and the program will run for nine years, with grant payments made over a five-year period.


Applications are being accepted on a continuous basis until March 31, 2027. Specific eligibility requirements must be met in order to be considered as an applicant. Eligibility requirements, application forms, and more information on the program can be found here. 


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Additional T4 and T4A Requirements for 2023 – Canadian Dental Care Plan

Due to the federal government setting up a Canadian Dental Care Plan for families that have adjusted net income of less than $90,000, there are new requirements on the 2023 T4 and T4A for all employers.


  • For T4s there will be an additional box (box 45) that must be filled out with information as to whether the employee and their spouse and dependents have access to dental benefits. 
  • For T4As the same information may be required 


It is important to note that employers will not be indicating whether the employee is utilizing the dental benefits that are provided by their employer, but whether they have access to them.


The following are the codes that would be put in either box 45 on the T4, or box 15 on the T4A:


  • Code 1 - No access to any dental care insurance or coverage of dental services of any kind
  • Code 2 - Access to any dental care insurance, or coverage of dental services of any kind for payee only
  • Code 3 - Access to any dental care insurance, or coverage of dental services of any kind for payee, spouse and dependents
  • Code 4 - Access to any dental care insurance, or coverage of dental services of any kind for payee and their spouse
  • Code 5 - Access to any dental care insurance, or coverage of dental services of any kind for only the payee and the dependents


These codes will be used by CRA in order to determine eligibility for the Canadian Dental Care Plan. 



For more information, please visit the CRA – T4/T4A Reporting Requirements webpage and the CRA – Canadian Dental Benefit webpage.

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Policy Updates

WSIB Changes

As of September 29, 2023, the WSIB must receive an employer’s accident report within three business days after the employer learns of the reporting obligation (business days are Monday to Friday, and do not include statutory holidays). This is a change from seven business days previously.


Minimum Wage Increase

General minimum wage in Ontario increased on October 1, 2023 to $16.55. Details on other minimum wage requirements can be found here.


Licensing Requirements of Temporary Help Agencies and Recruiters – Comes into effect July 1, 2024

Beginning on July 1, 2024, employers will be responsible to ensure that any company they are using to recruit is licensed – even if the recruiter and/or help agency works outside of the province/country when they are recruiting for Ontario. It is expected that in 2024, the government will have all licensed companies posted on their website. 


Ward & Uptigrove Human Resources Solutions has applied to become a licensed recruiter to continue to serve our clients.




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Disconnecting from Work

A reminder that beginning in 2023 and the years following, employers that employ 25 or more employees on January 1 of any year must have a written policy on disconnecting from work in place before March 1 of that year. You can learn more about disconnecting from work policies here.


Electronic Monitoring

A reminder that employers with 25 or more employees on January 1 of any year are required to have a written policy on the electronic monitoring of employees in place. To learn more, visit the website here.




Grants

Canada Summer Jobs

Canada Summer Jobs (CSJ) provides wage subsidies to employers to create quality summer work experiences for young people aged 15 to 30 years. Funding can be up to 100% of general minimum wage for non-profit organizations, and 50% for private and public sector organizations. 


Applicants are considered based on a number of requirements, including special local priorities. Local priorities for Perth-Wellington include:


  • Support for a local event: Community events
  • Support for a specific type of project: Projects supporting not for profit organizations
  • Support for a specific type of project: Projects supporting small businesses
  • Support for projects that offer programs and/or support to specific target groups: Children and/or youth
  • Support for projects in a specific economic sector: Agricultural, forestry, fishing and hunting


To learn more about CSJ or to apply, visit the website here.


Canada-Ontario Job Grant

Canada-Ontario Job Grant (COJG) provides opportunities for employers to invest in their workforce, with help from the government.


  • Employers can get up to $10,000 in government support per person for training costs.
  • The training must be delivered by an eligible, third-party trainer.
  • Employers with 100 or more employees need to contribute 1/2 of the training costs. Small employers with less than 100 employees need to contribute 1/6 of training costs.
  • Most organizations acting as an intermediary are eligible for administrative funding equal to 15% of the government contribution.


To learn more about the COJG or to apply, visit the website here.

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Paying Down Debt Vs. Saving

This article is based off our podcast episode “Paying Down Debt vs. Saving with a Wealth Advisor”. If you prefer to listen rather than read, you can find it here.


It’s been about two years since Central Banks started increasing interest rates to combat inflation. For anyone with debt in their lives, the question has likely become “Do I put extra money towards paying down debt, or do I save it?”.


Investing and paying down debt are both forms of spending that improve your net worth. If you’re investing, the value of your assets increases. If you’re paying down debt, your liabilities decrease. Either are a good choice when it comes to increasing your net worth, but one may be better than the other depending on your personal situation.


How do you weigh the options of paying down debt versus investing?

When you pay down debt, you’re reducing the amount of interest you’ll pay in the future. For example, if you have a $100,000 loan that has a 5% interest rate on it and you pay off that loan, you will have saved yourself $5,000 in interest expense.


There is less certainty when you invest, unless you’re choosing a GIC or similar investment. If you’re putting funds into a balanced portfolio with stocks and bonds, the value of that initial investment can go up and down. Your rate of return simply cannot be guaranteed.


In choosing to pay down debt, you are guaranteed a rate of return – unless you have a variable rate in place. Typically, though, you know what your interest cost will be annually. In choosing to invest, you are asking yourself whether you can do better than the guaranteed rate of return on your debt. Interest rates were historically low up until last year – your guaranteed rate of return on debt was maybe 2% - so it was less attractive to pay down debt.

What about those who are still benefiting from a low fixed interest rate on their debt?


Many people are still benefiting from historically low fixes rates today. If you got a new mortgage in 2020 or 2021, you could have a mortgage rate under 2%. In hearing that mortgage rates have climbed to 7% at the time of writing, some people are feeling panicked, thinking they need to pay down their mortgage. However, doing so right now may not be in your best interest financially.


Alternatively, having a lump sum ready to pay down on your mortgage when it matures IS a good idea. If you have money from an inheritance for example and you’re not sure what to do with it, one strategy could be to put that money in a risk-free investment that could earn you 5% now, beating that 2% mortgage. If you ensure your risk-free investment matures at the same time or a bit before your mortgage term, you can then use that lump sum to pay down your debt. In this way, you’re able to take advantage of the higher interest rates now.


There are more things to consider like how tax impacts your decision, the type of debt you have, and cash flow needs. For a more detailed breakdown, listen to the full episode of “Integrating for Success” here. 


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By the Numbers



Why did IAIC change their name to TriCert Investment Counsel?

They wanted a name that brings clarity to our approach, is easy to say and is memorable. TriCert exemplifies our integrated approach of bringing together your three (Tri-) certified (-Cert) professionals (CPA, CFP, and CIM/CFA) as one team to better serve you and deliver results. Their new identity provides a better understanding of how your portfolio manager works with your accountant and financial planner to deliver comprehensive and tax-efficient solutions. Your business with TriCert Investment Counsel, formerly IAIC, remains uninterrupted. 


Visit their new website at www.TriCert.ca to learn more.


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Firm News

Did you know Ward & Uptigrove has its own podcast called “Integrating for Success”? We answer pressing client questions like “should I be paying down debt or saving?” and “how can I attract talent as a veterinary hospital?”


You can listen on our website here or wherever you get your podcasts.

Staff Updates

As 2023 comes to a close, we reflect on our 65th year of growth and progression with our staff. We are proud to congratulate the following staff members on their development and progression into new roles.


Principal Announcement


Congratulations to the following staff members on their progression to a Principal position in the firm, taking the next steps along their leadership journey. We look forward to seeing these individuals continue to develop and progress within the firm, and we thank them for their ongoing contributions.

Evan Fallis, CPA

Principal

Chad Martin, CPA

Principal

Ryan Goetz, CPA, CFA

Principal

Agriculture Department 

Progressions


Sunette Pelser

Junior Accountant

Cassandra Gesinghaus

Intermediate Accountant

Brent Mulder

Intermediate Accountant

Brayden Pellett

Senior Accountant

Chris Raben

Senior Accountant

Erin Stahlke

Senior Accountant

Jordan Wilson

Senior Accountant

Business Department

Progressions


Erin Marshall

Junior Accountant

Kate Smith

Intermediate Accountant

Bradley Babstock

Senior Accountant

Thomas Crummer

Senior Accountant

Cole Fletcher

Senior Accountant

James Hruska

Senior Accountant

Ahmed Makhtoum

Senior Accountant

Craig Vanderheyden

Senior Accountant

Heather Hamilton

Accounting Manager

Tax Department

Progressions


Christie Gingrich

Senior Tax Accountant

HR Solutions

Progressions


Lena Kamasinska

HR Advisor

Admin/Operations

Progressions


Hollie Card

Administrative Assistant to P&P

Luuk Postuma

IT Services Manager


Congratulations on your retirement!

Brad Buchanan, CPA, CGA

Partner


After 36 years with Ward & Uptigrove, Brad Buchanan is retiring from the Partnership and transitioning to a Counsel role.


Brad will continue to serve his clients over the next few years, while he focuses on transitioning his clients to a new advisor at the firm.


We are thankful for Brad’s ongoing contributions to the firm.


Years of Service

Congratulations to the following staff members on reaching these career milestones. We thank you for your contributions and loyalty to the firm:

5 Years of Service

Pat Downey

Wealth Advisor

Jennifer Goertzen

H&S Advisor

Julia Husnik

Internal Finance Accountant

Vanessa Martin

Senior Accountant

Debbie Schalk

Bookkeeping Admin

Amina Sulemanovski

Intermediate Accountant

Garrett Topic

Principal

10 Years of Service

Don Annett

Intermediate Accountant

Dan Benbow

Principal

Mel Berfelz

Administrative Team Manager

Jake Heibein

Accounting Software Manager

Jenny MacDonald

Principal

Cam Ridgway

Accounting Supervisor

Jill VanderWier

Senior Accountant

15 Years of Service

Patty Zurbigg

Accounting Manager

25 Years of Service

Rick Town

Wealth Advisor

35 Years of Service

Randy Anderson

IT Infrastructure Manager

Welcome!

We are thrilled to welcome the following new staff members to our team since July:

Kyle Brown

Senior Accountant

Alyssa Lidow

HR/H&S Coordinator (HRS)

Christine Johnston

Accounting Technician

Christine Smith

Accounting Technician

Kelly Szasz

Receptionist

Amanda Van Stee

Intermediate Accountant

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Happy Holidays

from the Partners and Staff of Ward & Uptigrove

2024 Year End Newsletter

December 19, 2024
Accounting

Summer 2024 Newsletter

June 27, 2024
Accounting

Corporate Succession Planning and Estate Equalization

June 19, 2024
When contemplating the next steps for your corporate ownership and succession planning, maintaining fairness among family members is often a main priority even though all families members may not be involved in the business. One crucial aspect often overlooked is estate equalization, particularly in family-owned or closely-held businesses. Unequal distributions of wealth can lead to the business being forced to sell necessary business assets, jeopardizing the future viability of the core operations and business altogether. However, with strategic planning and the implementation of corporate life insurance, businesses can ensure equitable outcomes while safeguarding ongoing business sustainability. Understanding Estate Equalization Estate equalization refers to the process of balancing inheritances among heirs, particularly when certain assets, such as business interests, are illiquid or disproportionately valuable. In the context of corporate ownership, ensuring fair vs equitable distributions becomes more complex due to the interplay of family dynamics, business operations, sweat equity and financial considerations. Without proper planning, disparities in inheritances can cause families disputes and undermine the integrity of the business.
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